Marc Faber's 2014 Predictions

Marc Faber has 3 very contrarian predictions for 2014 that we are sure will have the yammering yay-bobs screaming. While "everyone thinks stocks can continue to rise," Faber sees "the US market as expensive," and will return very little over the next few years. Furthermore, he adds, while "some stocks are not terribly expensive; but just like in the year 2000, [social media] stocks are grossly over-valued," and a short basket in the most egregious will return at least 30% next year. Lastly, Faber exclaims, "given all the money printing that is going on globally... physical gold is a good insurance."

Faber says: "My sense is that at the present time, the US market is relatively expensive compared to foreign markets, especially to European markets and to emerging markets. On a cyclically-adjusted P/E [price-to-earnings] basis, it is actually going to return very little over the next seven to 10 years.

Faber says: "If you look at the entire market, some stocks are not terribly expensive and some stocks are very expensive. It's like in year 2000, not every stock was overpriced. At that time, the NASDAQ was grossly overvalued but, say, resource shares and so-called 'old economy' companies were relatively inexpensive or absolutely cheap. In the present instance, I think that stocks like Facebook, Tesla, Twitter, Netflix, [and] Veeva Systems are grossly overvalued and that the basket of shorts in these stocks will return you at least 30% next year."

3. Best longs for 2014: Gold, gold shares, and Vietnamese stocks

Faber says: "Given all the money printing that is going on globally – and not just in the US – and given that the total credit as a percent of the advanced economies is now 30% higher than in 2007 before the crisis hit, I think that gold is a good insurance."

"I'd rather buy something that is reasonably priced. And, I think gold shares are very inexpensive. So a basket of gold shares I think next year could easily appreciate 30%."

"I think the Vietnamese stock market, which this year was up 22% [and] which is not bad for an emerging market, will continue to go up."

Both Faber and Rogers cautioned about gold. It's Eric King from KWN that has been persistently promoting gold and gold stocks every week regardless of micro or macro conditions. Anyone owning any gold stocks in the past three years knows full well what the performance has been.

Making predictions (correctly!) is very difficult. I know, because I have tried and have usually been WRONG. Nonetheless, unless someone is clearly talking their book (typical and common), I admire people for thinking this through and taking their best shot.

I will be thinking over the next few days as well re 2014. I will not make predictions, as (above mentioned) they are no good. But there is PLENTY to think about. I will get started soon...

I like Faber.....I really do, but the guy has been just dead wrong. That being said, Faber seems like a great guy to share a pilsner with. The great irony is that doomer mongers like Faber actually strengthen the market. So long as everyone questions whether the market can go higher, it will.

Stock and house prices have been artificially propped up by the Fed. As market forces sink in we will see them correct I suspect. The 10-yr is already over 3% and I see house sales dropping and builders offering many more 'incentives' for their new houses.

Stagnant Wages will remain a Big problem. I don't see any company in my area increasing wages and many are even still cutting benefits.

The flood of cheap pabor will continue to saturate our economy resulting in even greater pressure on wages esp in IT and blue collar areas.

Owning Some Physical Gold Is A Prudent Insurance Basically we are in an environment where central banks are monetizing debts and where the balance sheets of central banks are increasing, and this will continue, especially in the United States and Europe. We are also in an environment where in the long run, a lot of sovereign debts will either not be paid or will have to be inflated away. So owning some physical gold is a prudent insurance. I am specifying here 'physical gold' because one wants to protect oneself as an investor for the potential of a systemic collapse of the financial system.

Housing, upon which rides 50% of the US economy today, will crash. Unemployment will rocket, Government debt will explode, intrest expense will go through the roof and crash the federal budget.

What could go wrong with that? Rates are not going much higher than they are right now and I think will go much lower as this little blip in rates will be shown to have killed any growth in the economy. The Fed will be forced to step on the printing accelerator again thereby distorting everything and anything from real price discovery.

We live in a mirage created by money printing and money pringint cannot last forever but it can go on for a very long time. So buy some physical for the eventual meltdown. It may come after you are dead but your kids will appreciate the forethought.

Forget stock prices, although I would buy mining stocks now because they're very undervalued. Gold is a finite element in a finite world loaded with paper debt. After 2008 and all the new liquidity that's being created, do you wait to see if the price drops? No. Because the day will come when they run out of physical to give to china and the real price will be set by the market.

Anyone owning any gold stocks in the past three years knows full well what the performance has been.

The FIAT dollar is a 4 headed hydra, read FEKETE, anything threatening it will be faught hard. In the end the fighting becomes so fierce the 4 heads begin lashing out in any and every direction. It is at that time the 4 necks will knot together and aphyxiation or self destruction wil occur.

Gold is the only hold right now for the long term. Sit back and watch the fight. The gold stocks will probably be nationalized at some point. If they are giong into Africa with drones to get gold, you can bet they will take the gold miners at home.

"I think the Vietnamese stock market, which this year was up 22% [and] which is not bad for an emerging market, will continue to go up."

Yeah right, and you'll get your whopping 22% 'return' in Vietnamese DONG (no joke!). Last time I was in Vietnam (about 6 months ago) I changed €50 and, if I remember correctly, I got something like 1,5 million Dong for it in return.

What's next? Faber recommending Zimbabwe stocks?

I like Faber's Gold call though, but I'm already curious how he will wiggle away from underneath that one if Gold tanks once the stock market tanks. Whether real or manipulated, Gold IMHO WILL be dragged down by stocks if a big sell off happens, like in 2008.

If he did, it would be the first time. He even admitted on CNBC that he should have called top before the drop from 1900 to where we are today.

I ask anyone to predict anything other than collapse because in a manipulated world, unless you're the manipulator - the only thing you can do is guess. I would hate to be one of the guys who empted their 401K's into yellow at 1900 only to find todays manipulated or otherwise buy it now figure of 1200

Can't remember him saying he got out of it. I know he thought it could go down a bit when it was still 1500-1600, but never recommended selling physical that you already owned in anything I ever read. Not sure if he has an advisory service though.

Ditto. NONE of the Rich & Famous gold promoters -- not a single MFing one of them -- had predicted gold to go from 1800 down to 1200.

It wasn't till it was in the 1500 range, that they suggested that it'd be a good buy at 1200-1300, because of the mining costs. All "motherhood + apple pie" stuff you can figure out yourself.

Even now you get a whole army of newsletter and stock-picking guys making juicy predictions about this company or that, this stock or that. If they were REALLY that good and had a decent batting average, then THEIR name would be up there with Warren Buffet. As it is, I'm tired of these News-Peddlers and their Pump & Dump games.

No dickhead,I work in high tech mfg 3/4 12 hour nightshifts with a 45 minute commute on each end. I would love to to take you to work with me so I could correctly train and then watch you kill yourself doing something stupid.

Zen on bling: If you buy bling but nobody notices (or cares) it is it really bling?

Corollary: If everyone buys the same bling that you buy, is the bling really bling or just mass produced useless garbage with an inflated pricetag which will lose its value when everyone decides that its not bling any longer?

FOFOA has a great article on just that subject (the very rich buying one-of-a-kind products). One thing he discusses is that the very rare and very high quality stuff often can get a very high price when the time comes to sell.

One problem (of course) is recognizing very high quality to begin with (as FOFOA discusses).

You forgot Israel as the headline for all your points, especially the terror axis point, while Turkey and the Saudis are there, Israel mysteriously was absent, when in fact it should have been the first one on the list.

The Pure Internal Evil of Holder, Jarret, Brenan & Sertero with the Pentagram / Ultra Evil CIA is an abomination. They as well as The Global Criminal Oligarch Cabal Bankster Intelligence Crime Syndicate will be held accountable.

Owning guns, gold and seeds (which I own, btw) is like clinging to a life preserver as a tsunami approaches. If you've ever been in a fire fight or a war zone (which I have) you know in your gut that when the chaos comes, nothing you do can really protect you. It's just blind luck and fate...

I agree that Marc missed those calls, although in deference to him, this was before it became apparent that every aspect of the markets are being manipulated by the central bankers. There is no way in hell this bitch keeps going higher without the free lunch being offered by the central bankers.

The house of cards doesn't necessarily collapse when the central planners say it does. So the probability of shit (really) hitting the fan at anytime since 2007 means physical gold was a good investment every year since then, and still is in 2014.

Faber's line on silver is always the same... It's a s good as gold, probably does better overall but always faces downside pressure because of its industrial properties; he prefers gold because less cumbersome to deal with in terms of storage, transportation, conversion etc. Keep in mind Faber doesnt buy ounces, he's talking kilos-tons. In short, he doesn't mind silver, he just prefers gold.

Platinum (A.K.A> Johnnie Walker Platinum) will remain expensive. (I recommend the duty free shops if you get the opportunity.) However, it will be not nearly as expensive as Johnnie Walker Blue Label, of which I continue to deny myself becuase no man should have to fork over 200 bucks for a bottle of scotch, no matter how smooth it is... sigh.

Mongoose - Nice post. I was laughing at the end because I read your statement as "BACK TO THE KILLER SHAKES." I thought you were saying you had the DTs from not having enough Scotch. I was going to remind you that J.W. does have a 'Red' for the po folks like me. Further, you can even just buy some good old American Whisky.

I hope you are OK and killin' snakes, not shaking like a dog shitting razorblades.

Thanks for the well wishes, dvfco. I've never had the DT's and don't plan on it either. It usually takes me months to empty a bottle of scotch. I don't always drink scotch, but when I do, I like the good stuff. If anyone ever offers you some Blue Label, take it and enjoy.

I stash $300+ / 30 year old whiskey any chance I get as a hobby. My wine stashing is way more important..

Eg. my last bottle. I paid 1500 pesos for a 30 year valentine in august. It is worth 3100 now. Yes the peso lost 30% to the dollar, but the math is still on my side.
I never owned a bottle of scotch that went down in price.

Interesting hobby, samcontrol. I'm afraid I'd be torn between selling to capture gains (cash transaction? Or bullion?) and drinking it on special occasions and then kicking myself later on for forgoing the gains.

Or, would it be a deductable loss? "I swear Mr Auditor, it was a huge party and some drunken SOB broke three bottles and tried to lap it up off the floor..." hmmm

Just back from a nice lunch in La Jolla, California with Larry Speidell, who runs a hedge fund which invests in Frontier markets, which he defines as markets insufficiently developed to qualify as emerging.

Larry visited Vietnam earlier this month and says:

" We are optimistic about the frontier in Southeast Asia. Their political problems will continue to be a drag, but on the streets the quality of life is improving. People are starting to have to learn lessons about budgeting their spending on small luxuries rather than living hand-to mouth. The middle class is rising!"

rode that Vietnam Fund train a long time ago, it never left the station, and probably never will. these Asians are not like the Chinese (which they fought in a war) those with money and education emigrated to america. i understand its a good place to live (anthony bordain said if he had one place other than NY to live it would be Vietnam, and he has a young daughter) and being a good place to live, it is probably a lousy place to invest or do business if you catch my drift

"In 2008 we had a financial crisis. The next train station stop is when governments go bust and I believe in the western world they all go bust! But before they do they will print money, then we go to war and all of us will be doomed!"~ Marc Faber, May 2009, New York.

Or does that apply just for "his tax-haven-of-residency" and home of "hot+cold running sex slaves": Thailand?

p.s. Trivia... did you know that when the former F1 Champ Niki Lauda retired (after accident and bad burn), that he started Lauda Air? Well, this enterprising Austrian was all pumped up no having charter flights from Vienna to Bang Kok, full of fat, horny, and affluent guys, looking to get their oil changed and engine overhauled in the new Sex Tourist trade with Thailand. In case that sort of thing interests you.

Whenever I hear or read that an American or Brit lives in Thailand, one of the first thoughts to occur is, "Is this guy there for the obvious reasons?" Why else does an English speaking person decide out of 200 countries in the world to move to Thailand?

Ahhhh, I am a US expat living in Thailand, so let me educate you.
Some of the many reasons we live here in south Thailand:
- it is possible to buy a decent (middle class) house for $50k US (our place is paid off... Imagine not paying a mortgage anymore. BTW, the banks pay interest here on savings!)
- low property tax bill $2 / year
- good food
- nice culture and people
- government extract taxes from import and luxury taxes and corporations vs. The "little guy," though they pay also
- few traffic fines are given (my daughter just got one - fine 400 ThB/~$13US. I looked this up online and the same ticket in New York State would have been $330-900)
- reasonable phone ($4/mo) and electrical ($50/mo) bills
- modern and good medical system delivered for a reasonable cost
- no ambulance chasing attorneys (if you sue someone and lose, you pay the legal costs for both parties - sure curbs the frivolous lawsuits)
- decent, though hot, weather (kinda like Hawaii but without the high
prices)
This place is not perfect. There are political and environmental issues, we don't have Home Depot, cheap cars or gasoline, but it is a decent system if you are a good citizen.
Thailand does have a reputation of having a large sex industry, which is probably deserved. However, there are many more industries here that are MUCH larger, i.e. Ag, auto, gas and oil, travel & tourism, clothing, etc.
I would rather be here as a guest, than be in the USA as a debt slave.